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TMI Blog2024 (6) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... come under the provisions of Section 271(1) (c) - AO has not doubted the sales and made disallowance of bogus purchases. We also rely on the ratio of M/s Nikunj Eximp Enterprises [ 2014 (7) TMI 559 - BOMBAY HIGH COURT] Accordingly, we considering the facts, circumstances and judicial decisions set aside the order of the CIT(A) and direct the assessing officer to delete the penalty and allow the grounds of appeal in favour of the assessee. - Shri Pavan Kumar Gadale, Judicial Member And Shri Girish Agrawal, Accountant Member For the Assessee : Shri. Raj Kumar Singh. AR For the Revenue : Ms. Rajeshwari Menon. Sr. DR ORDER PER PAVAN KUMAR GADALE, JM: These are the appeals filed by the assessee against the separate orders of the National Facel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. That the appellant craves the leave to amend, alter, substitute any of the above appeal grounds and or to raise new or additional grounds of appeal at the time of hearing. 3. The brief facts of the case are that, the assessee is engaged in the business of ferrous and non ferrous metals. The assessee has filed the return of income for the A.Y 2009-10 on 25.10.2009 disclosing a total income of Rs. 11,06,826/- and the assessment was completed u/sec 143(3) of the Act determining total income of Rs. 11,80,720/- vide order dated 12.12.2011. The Assessing Officer(AO) has received the information from DGIT(Inv) Mumbai that the assessee has obtained accommodation bills/bogus purchase bills from various parties as per website of sales tax departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(c) of the Act, Since assessee has entered into bogus purchase transactions, the A.O relied on the findings in the scrutiny assessment and the assessee has not filed the reply/explanations in the penalty proceedings. Finally, the A.O has levied penalty based on the addition made in the scrutiny assessment, which worked out to Rs. 55,93,092/- and passed the order u/s 271(1)(c) r.w.s 274 of the Act dated 31.03.2017. 5. Aggrieved by the penalty order, the assessee has filed an appeal with the CIT(A). The CIT(A) considered the grounds of appeal, statement of facts, findings of scrutiny assessment and the submissions of the assessee. In the course of appellate proceedings it was brought to the knowledge of the CIT(A) that the assessee has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) on quantum addition of bogus purchases has directed the A.O to restrict the disallowance @17.5% and on further appeal by the assessee against the CIT(A) order, the Hon ble Tribunal has restricted the disallowance @8% of alleged bogus purchases. We are of the opinion, that where the addition is sustained on the estimated basis, no penalty u/s 271(1)(c) of the Act can be levied. We find that the disallowance of purchases on adhoc basis does not tantamount to furnishing inaccurate particulars of income under the provisions of Section 271(1) (c) of the Act. The Assessing officer has not doubted the sales and made disallowance of bogus purchases. We also rely on the ratio of the Honorable Jurisdictional High Court in the case of M/s Nikunj Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. 13. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue as envisaged by the Ld. DR that the CIT(A) has erred in partly deleting the penalty overlooking the transactions of bogus purchases. We are of the opinion that when the addition is on estimated basis, penalty u/s 271(1)(c) of the Act cannot be levied on such adhoc estimated income. The disallowance of purchases on ad-hoc basis does not tantamount to furnishing inaccurate particulars of income under the provisions of Section 271(1) (c) of the Act. Since we have dealt and decided this disputed issue in the assessee appeal and relied on judicial decisions and find that penalty cannot be levied on the estimated income as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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